Correlation Between NYSE Composite and Nextier Oilfield
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Nextier Oilfield at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NYSE Composite and Nextier Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Nextier Oilfield Solutions, you can compare the effects of market volatilities on NYSE Composite and Nextier Oilfield and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NYSE Composite with a short position of Nextier Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Nextier Oilfield.
Diversification Opportunities for NYSE Composite and Nextier Oilfield
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Nextier is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Nextier Oilfield Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextier Oilfield Sol and NYSE Composite is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NYSE Composite are associated (or correlated) with Nextier Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextier Oilfield Sol has no effect on the direction of NYSE Composite i.e., NYSE Composite and Nextier Oilfield go up and down completely randomly.
Pair Corralation between NYSE Composite and Nextier Oilfield
If you would invest 1,482,589 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 529,756 from holding NYSE Composite or generate 35.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.37% |
| Values | Daily Returns |
NYSE Composite vs. Nextier Oilfield Solutions
Performance |
| Timeline |
NYSE Composite and Nextier Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Nextier Oilfield Solutions
Pair trading matchups for Nextier Oilfield
Pair Trading with NYSE Composite and Nextier Oilfield
The main advantage of trading using opposite NYSE Composite and Nextier Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Nextier Oilfield can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nextier Oilfield will offset losses from the drop in Nextier Oilfield's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Nextier Oilfield vs. ProPetro Holding Corp | Nextier Oilfield vs. Select Energy Services | Nextier Oilfield vs. Liberty Oilfield Services | Nextier Oilfield vs. Cactus Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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